163 | How Pakistan Can Increase Its Export? Ft. Gonzalo Varela
Thought Behind Things
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Is the Type of Investment That Attracts the Most Profitable Sector?
If an economy has artificially high exchange rates for a relatively appreciated rupee, t is likely that the type of investment it attracts is in non trade. The tradable sector is not very profit in that economy, right? Because it's more profitable to import things rather than to produce them at home. If instead, you have a more depreciated currency, you're likely to attract thetype of investment that will focus on producing thing and selling them abroad. That tends to be associated with faster productivity growth,.
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